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FAAC Payout Drops by N90b in October

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Federation Account Allocation Committee
  • FAAC Payout Drops by N90b in October

Total payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government decreased by N90 billion in October, from N420 billion in September, FBNQuest has said.

In a report, FBN Quest, the investment and research arm of FBN Holdings, said crude oil price crash hit the FAAC cash, leading to the drop in the allocation and the inability of many states to honour recurrent obligations, including salaries and pension liabilities, as well as capital obligations.

FBNQuest said the statutory distribution of N251 billion was supplemented by excess petroleum tax payments of N63 billion, an exchange-rate gain of N41 billion, the regular Nigeria National Petroleum Corporation (NNPC) refund of N6 billion and an undisclosed amount from Value Added Tax (VAT).

The report titled: ‘A marked decline in the FAAC payout’, said the figure fell below the forecast pro rata monthly average of N477 billion in the 2016 budget, which projects the net distribution from the Federation Account and the VAT pool combined at N5.72 trillion, for the first time in four months.

It said the three previous distributions were boosted by the impact of the Central Bank of Nigeria (CBN) ‘devaluation’ on June 20, adding that both petroleum receipts based on the US dollar price and customs revenues benefited from the adjustment.

The Central Bank of Nigeria (CBN) had abandoned a 16-month currency peg on June 20 and adopted flexible foreign exchange policy, which gave the naira greater flexibility to adjust against the dollar. The ‘devaluation’ of the naira was meant to provide the much-desired stimulus and foreign portfolio investment needed to boost investments in the capital market.

The drop in FACC revenues was also caused by the state of force majeure at the Bonny terminal and the subsisting force majeure at the Forcados terminal as well as the drop in non-mineral revenue in September.

However, the Excess Crude Account (ECA) balance stood at $2.45 billion and compromised part of official reserves, which amounted to $23.91 billion as at October 21.

Analysts insist the oil price crisis resulted from drastic, adverse structural shift in the global market demand and supply of oil and gas. International market price of oil dropped by about 43 per cent from an average of about $100.35 for the 12 months of 2014 to an average of $57.20 for the first six months of last year and closed at $51 on Monday.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Ecobank To Pay Customers N5 For Every Dollar Received

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ecobank

Ecobank To Pay Customers N5 For Every Dollar Received

Ecobank has implemented the CBN scheme which offers N5 for every Dollar received into domiciliary accounts or as cash over the counter. Korede Demola-Adeniyi; Head, of Consumer Banking, Ecobank Nigeria, who announced this in Lagos stated that the decision is in line with the CBN directive and fully aligns with efforts to encourage the inflow of diaspora remittances into the country.

She noted that the “CBN Naira 4 dollar scheme” is an unprecedented incentive for senders and recipients of international money transfers.

Korede Demola-Adeniyi said that the scheme takes effect from 8th March and will run till 8th May 2021. “Ecobank will pay N5 on every Dollar so beneficiaries will not only get the foreign currency sent from their family and friends abroad, but they will also get extra Naira”, she stated.

Only recently, Ecobank had a first-of-its-kind virtual Diaspora Summit to discuss opportunities for Nigerians living abroad and the various platforms available to assist them with their investment decisions and remittance needs. The event had major players in the remittance space, diaspora audience, government officials and notable stakeholders in attendance.

Further, the Managing Director, Ecobank Nigeria, Patrick Akinwuntan has disclosed that apart from consistent engagement with Nigerians in the diaspora, Ecobank is leveraging its digital technology to make remittances to Nigeria and Africa easy, convenient and affordable.

Mr. Akinwuntan stated that growing evidence has shown a positive relationship between diaspora remittances and economic growth.

“Ecobank will continue to pursue its mandate of helping to enhance the economic development and integration of Africa, through the 33 countries where the bank operates on the continent. Ecobank’s Rapidtransfer and mobile app (Ecobank Mobile) enable Africans, wherever they are, to easily and instantly send money to bank accounts, mobile wallets and agent locations across 33 African countries”, he stated.

Ecobank Nigeria, a member of the Pan African Banking Group is committed to supporting Africans in the diaspora by providing advisory services, remittance solutions, investment options and financial planning schemes. The bank also offers mortgages, treasury bills, capital market instruments, among others.

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Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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FCMB

The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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cbn

Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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